Understanding Corporate Culture and Its Relation to Strategy

Abstract

The article examines the concept of corporate culture in relation to the assumptions that underlie its use. Although the focus on corporate culture might appear to be a reaction against the rational model of organizational life, there is an important sense in which it actually enhances the rationalist perspective. Managerial concern tends to focus on culture as a crucial factor determining how well an organization copes with its strategic imperative: the need to remain or become competitive in the face of changing economic circumstances. If the culture is not fully synchronized and consonant with the favored strategy, then cultural resistance to change has to be eliminated. This view assumes the organization to be actively geared to the achievement of end states--profitability or the welfare of its members--which, in turn, assumes the organization to be a purposive, rational process. The article examines the concept of corporate culture in relation to the assumptions that underlie its use. Although the focus on corporate culture might appear to be a reaction against the rational model of organizational life, there is an important sense in which it actually enhances the rationalist perspective.